Netflix's 20-Year Investment Returns Astound
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 hours ago
0mins
Should l Buy NFLX?
Source: NASDAQ.COM
- Investment Returns: An investment of $1,000 in Netflix in 2006 would now be worth $227,855, reflecting a staggering 22,676% gain and an annualized return of 31.17%, vastly outperforming the S&P 500's 9.1% average.
- Historical Volatility: Netflix faced a significant setback in 2011 when it split its operations, causing a 75% drop in stock price; however, the company rebounded by becoming a major producer of original content, successfully attracting millions of new subscribers.
- Global User Base: Currently, Netflix entertains over half a billion users across more than 190 countries, with projected ad revenues reaching $3 billion by 2026, which will further solidify its market position.
- Valuation Analysis: With a forward-looking P/E ratio of 30, slightly below the five-year average of 32, analysts suggest that Netflix's stock is not excessively overvalued, prompting investors to carefully consider their entry point.
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Analyst Views on NFLX
Wall Street analysts forecast NFLX stock price to rise
38 Analyst Rating
27 Buy
10 Hold
1 Sell
Moderate Buy
Current: 93.320
Low
92.00
Averages
114.18
High
150.00
Current: 93.320
Low
92.00
Averages
114.18
High
150.00
About NFLX
Netflix, Inc. is a provider of entertainment services. The Company acquires, licenses and produces content, including original programming. It provides paid memberships in over 190 countries offering television (TV) series, films and games across a variety of genres and languages. It allows members to play, pause and resume watching as much as they want, anytime, anywhere, and can change their plans at any time. The Company offers members the ability to receive streaming content through a host of Internet-connected devices, including TVs, digital video players, TV set-top boxes and mobile devices. It is engaged in scaling its streaming service, such as introducing games and advertising on its service, as well as offering live programming. It is developing technology and utilizing third-party cloud computing, technology and other services. The Company is also engaged in scaling its own studio operations to produce original content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Netflix Raises Prices Again, Showcasing Pricing Power
- Price Increases: Netflix has quietly raised prices across all U.S. subscription plans, with the standard ad-free tier increasing from $17.99 to $19.99, demonstrating its strong pricing power and expected to drive further revenue growth.
- Strong Financial Performance: In Q4 2025, Netflix's revenue rose 17.6% year-over-year to approximately $12.1 billion, while earnings per share increased by 31% to $0.56, indicating healthy growth in memberships and advertising business.
- Operating Leverage Improvement: Netflix achieved a 29.5% operating margin in 2025, up from 26.7% in 2024, with management targeting a further increase to 31.5% in 2026, showcasing the company's advantage in controlling content costs.
- Cash Flow Growth: The company generated $9.5 billion in free cash flow in 2025, up from $6.9 billion in 2024, reflecting rapid expansion of its advertising segment and providing ample funding for future investments.
See More
Warren Criticizes Netflix Price Hike After $2.8 Billion Payout
- Warren's Critique: Senator Elizabeth Warren criticized Netflix on social media for raising prices after receiving a $2.8 billion payout, arguing that this move is unfair to millions of customers and reflects the company's disregard for its user base.
- Price Increase Details: Netflix announced a minimum price increase of $1 across all subscription plans, with the ad-supported plan rising from $7.99 to $8.99, the standard plan increasing to $19.99, and additional user fees also going up, indicating ongoing pressure from content investment demands.
- Industry Trend: Netflix's price hike aligns with a broader trend in the streaming sector, as other companies like Spotify, Amazon, and Disney have also raised prices recently, highlighting increasing competition and rising cost pressures within the industry.
- M&A Context: The criticism comes in the wake of Netflix's failure to raise its $82.7 billion bid in a takeover attempt for Warner Bros., which resulted in Paramount paying a $2.8 billion breakup fee, adding weight to Warren's critique and underscoring contradictions in the company's financial decisions.
See More
2026 Economic Outlook and Uber Developments
- GDP Growth Slowdown: The GDP growth rate for Q1 2026 is only 0.7%, significantly lower than the previous estimate of 1.4%, indicating a sluggish economic recovery that may dampen investor confidence and negatively impact stock market performance.
- Rising Inflation Pressure: With inflation exceeding 3% in January, combined with slowing GDP growth, concerns about stagflation may arise, leading to reduced consumer spending and threatening corporate profitability.
- Surge in Oil Prices: West Texas Intermediate crude oil prices have surged from $57 on January 2 to $93, even exceeding $100 at times, increasing consumer energy expenditure pressure and potentially suppressing spending in other areas.
- Uber's Autonomous Driving Partnerships: Uber has recently formed partnerships with several companies, including Waymo and Lucid, indicating its proactive positioning in the autonomous driving sector, which may lay the groundwork for future market share growth.
See More
2026 Economic Outlook and Oil Price Fluctuations
- GDP Growth Slowdown: The GDP growth rate for Q1 2026 is only 0.7%, significantly lower than the previous estimate of 1.4%, indicating economic stagnation that may heighten investor concerns about future economic prospects.
- High Inflation Pressure: With inflation exceeding 3% in January, combined with low growth, market fears of stagflation are rising, which could negatively impact consumer spending and business investment decisions, further dragging down economic recovery.
- Surging Oil Prices Impact: As of the recording date, West Texas Intermediate crude oil prices have reached $93 per barrel, a significant increase from $57 on January 2, which may force consumers to cut back on other expenditures due to rising energy costs, affecting overall economic activity.
- Geopolitical Risks: The rise in oil prices is primarily driven by geopolitical conflicts rather than demand growth, particularly due to uncertainties surrounding Iran, which could lead to a more pessimistic economic outlook, necessitating close monitoring of related developments.
See More
Netflix Raises Prices Across All Streaming Plans Amid Content Spending Surge
- Price Increase: Netflix announced a minimum $1 increase across all streaming plans, with the ad-supported plan rising from $7.99 to $8.99, the standard plan to $19.99, and the premium tier to $26.99, indicating pressure from content investment costs.
- Additional Fees Rise: Fees for extra members have also increased, with ad-supported plans now charging $6.99 per additional user (up from $5.99) and ad-free accounts at $9.99 (previously $8.99), further straining users' budgets.
- Content Investment Surge: Netflix plans to invest $20 billion in programming in 2025, which is $2 billion more than last year, aiming to attract more subscribers and boost ad revenue through a rich slate of original content and live events.
- Revenue Forecast: The company projects 2026 revenue between $50.7 billion and $51.7 billion, primarily driven by higher membership fees and nearly doubling ad income, reflecting its strategy to balance rising content costs with profitability pressures.
See More
Netflix's Incredible Investment Returns Over 20 Years
- Investment Returns: Investing $1,000 in Netflix 20 years ago would now be worth $227,855, reflecting a staggering 22,676% gain and an annualized return of 31.17%, vastly outperforming the S&P 500's 9.1% return.
- Market Performance Comparison: In contrast, the S&P 500 would have turned that $1,000 into $5,712 (or $7,253 with dividends reinvested), highlighting Netflix's superior investment value compared to market averages.
- User Growth and Content Production: After a significant setback in 2011 due to a business split, Netflix successfully transformed into a major original content producer, now boasting over 500 million users across more than 190 countries, demonstrating strong market appeal.
- Advertising Revenue Outlook: With projected ad revenues reaching $3 billion by 2026, Netflix is enhancing its profitability; although its current P/E ratio stands at 30, slightly below the five-year average of 32, it still indicates potential for investment.
See More
Netflix Raises Prices Again, Showcasing Pricing Power
- Price Increases: Netflix has quietly raised prices across all U.S. subscription plans, with the standard ad-free tier increasing from $17.99 to $19.99, demonstrating its strong pricing power and expected to drive further revenue growth.
- Strong Financial Performance: In Q4 2025, Netflix's revenue rose 17.6% year-over-year to approximately $12.1 billion, while earnings per share increased by 31% to $0.56, indicating healthy growth in memberships and advertising business.
- Operating Leverage Improvement: Netflix achieved a 29.5% operating margin in 2025, up from 26.7% in 2024, with management targeting a further increase to 31.5% in 2026, showcasing the company's advantage in controlling content costs.
- Cash Flow Growth: The company generated $9.5 billion in free cash flow in 2025, up from $6.9 billion in 2024, reflecting rapid expansion of its advertising segment and providing ample funding for future investments.
See More
Warren Criticizes Netflix Price Hike After $2.8 Billion Payout
- Warren's Critique: Senator Elizabeth Warren criticized Netflix on social media for raising prices after receiving a $2.8 billion payout, arguing that this move is unfair to millions of customers and reflects the company's disregard for its user base.
- Price Increase Details: Netflix announced a minimum price increase of $1 across all subscription plans, with the ad-supported plan rising from $7.99 to $8.99, the standard plan increasing to $19.99, and additional user fees also going up, indicating ongoing pressure from content investment demands.
- Industry Trend: Netflix's price hike aligns with a broader trend in the streaming sector, as other companies like Spotify, Amazon, and Disney have also raised prices recently, highlighting increasing competition and rising cost pressures within the industry.
- M&A Context: The criticism comes in the wake of Netflix's failure to raise its $82.7 billion bid in a takeover attempt for Warner Bros., which resulted in Paramount paying a $2.8 billion breakup fee, adding weight to Warren's critique and underscoring contradictions in the company's financial decisions.
See More
2026 Economic Outlook and Uber Developments
- GDP Growth Slowdown: The GDP growth rate for Q1 2026 is only 0.7%, significantly lower than the previous estimate of 1.4%, indicating a sluggish economic recovery that may dampen investor confidence and negatively impact stock market performance.
- Rising Inflation Pressure: With inflation exceeding 3% in January, combined with slowing GDP growth, concerns about stagflation may arise, leading to reduced consumer spending and threatening corporate profitability.
- Surge in Oil Prices: West Texas Intermediate crude oil prices have surged from $57 on January 2 to $93, even exceeding $100 at times, increasing consumer energy expenditure pressure and potentially suppressing spending in other areas.
- Uber's Autonomous Driving Partnerships: Uber has recently formed partnerships with several companies, including Waymo and Lucid, indicating its proactive positioning in the autonomous driving sector, which may lay the groundwork for future market share growth.
See More
2026 Economic Outlook and Oil Price Fluctuations
- GDP Growth Slowdown: The GDP growth rate for Q1 2026 is only 0.7%, significantly lower than the previous estimate of 1.4%, indicating economic stagnation that may heighten investor concerns about future economic prospects.
- High Inflation Pressure: With inflation exceeding 3% in January, combined with low growth, market fears of stagflation are rising, which could negatively impact consumer spending and business investment decisions, further dragging down economic recovery.
- Surging Oil Prices Impact: As of the recording date, West Texas Intermediate crude oil prices have reached $93 per barrel, a significant increase from $57 on January 2, which may force consumers to cut back on other expenditures due to rising energy costs, affecting overall economic activity.
- Geopolitical Risks: The rise in oil prices is primarily driven by geopolitical conflicts rather than demand growth, particularly due to uncertainties surrounding Iran, which could lead to a more pessimistic economic outlook, necessitating close monitoring of related developments.
See More
Netflix Raises Prices Across All Streaming Plans Amid Content Spending Surge
- Price Increase: Netflix announced a minimum $1 increase across all streaming plans, with the ad-supported plan rising from $7.99 to $8.99, the standard plan to $19.99, and the premium tier to $26.99, indicating pressure from content investment costs.
- Additional Fees Rise: Fees for extra members have also increased, with ad-supported plans now charging $6.99 per additional user (up from $5.99) and ad-free accounts at $9.99 (previously $8.99), further straining users' budgets.
- Content Investment Surge: Netflix plans to invest $20 billion in programming in 2025, which is $2 billion more than last year, aiming to attract more subscribers and boost ad revenue through a rich slate of original content and live events.
- Revenue Forecast: The company projects 2026 revenue between $50.7 billion and $51.7 billion, primarily driven by higher membership fees and nearly doubling ad income, reflecting its strategy to balance rising content costs with profitability pressures.
See More
Netflix's Incredible Investment Returns Over 20 Years
- Investment Returns: Investing $1,000 in Netflix 20 years ago would now be worth $227,855, reflecting a staggering 22,676% gain and an annualized return of 31.17%, vastly outperforming the S&P 500's 9.1% return.
- Market Performance Comparison: In contrast, the S&P 500 would have turned that $1,000 into $5,712 (or $7,253 with dividends reinvested), highlighting Netflix's superior investment value compared to market averages.
- User Growth and Content Production: After a significant setback in 2011 due to a business split, Netflix successfully transformed into a major original content producer, now boasting over 500 million users across more than 190 countries, demonstrating strong market appeal.
- Advertising Revenue Outlook: With projected ad revenues reaching $3 billion by 2026, Netflix is enhancing its profitability; although its current P/E ratio stands at 30, slightly below the five-year average of 32, it still indicates potential for investment.
See More
